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Car hire glossary

Renting a car? Here’s a rundown of all the important terms you need to know.

Hiring a car and making sense of the vehicle rental agreement can be a daunting prospect, so we've created this glossary with an explanation of all the important terms you need to understand.


Note: The following definitions may vary between insurers and policies. These definitions are intended to be generally useful, rather than a guide to a specific policy or insurer.


  • Accident. An unintended and unforeseen collision between your rental car and any other object.
  • Additional driver. Any other person additional to the main driver who has been approved by the rental company to drive the rental vehicle.
  • Additional liability insurance. Insurance that provides additional protection for your legal liability for causing bodily injury or death to someone else, or damage to someone else’s property.
  • Administration surcharge. A fee that covers the hire company’s administrative costs associated with your rental vehicle.
  • Age surcharge. See “Young driver surcharge”
  • Airport surcharge. An additional fee that applies to your rental agreement when you pick your car up from an airport.
  • Authorised driver. Any person approved by the rental company to operate the hire vehicle.


  • Bond. A refundable security deposit taken by the rental company to help cover any additional charges you may incur.


  • Cancellation fee. Fee charged by the rental company if you decide to cancel your booking.
  • Collision damage waiver. Optional damage insurance cover for your rental vehicle. Sometimes referred to as “loss damage waiver”.
  • Credit card surcharge

An additional fee that covers the rental company’s processing costs when you pay with a credit card.


  • Excess. The amount you must pay if the vehicle is damaged during the rental period.
  • Excess kilometres fee. Fee imposed by the rental company if you exceed the limit placed on the distance you are allowed to drive your rental car.
  • Excess reduction. Optional insurance cover that reduces the excess payable if the vehicle is damaged during the rental period.
  • Express return. Express return boxes allow you to securely return your rental car keys after hours when the rental depot is unmanned.


  • Grace period. The amount of time you’re allowed to be late returning your vehicle before additional charges begin to accrue. Grace periods vary between rental companies but are usually 29 or 59 minutes.


  • International Driving Permit (IDP). An international driving licence sanctioned by the United Nations and translated into 9 different languages.


  • Late return fee. Fee charged if you don’t return the vehicle on the date and by the time shown on the rental agreement.
  • Limited kilometres. The maximum number of kilometres you are permitted to travel in your rental car.
  • Loss damage waiver. Optional damage insurance cover for your rental vehicle. Sometimes referred to as “collision damage waiver”.
  • Lost accessory fee. Fee imposed by the rental company if you lose an accessory (eg a GPS device) you hired as part of the rental agreement.


  • One-way fee. Also called a relocation fee, this charge applies if you drop the rental car off in a different location to where you picked it up.
  • Overhead damage. Damage to the rental vehicle above the top of the door seal or above the top of the front or back windscreens.


  • Personal accident insurance. Covers the driver and passenger of the vehicle if they are injured in an accident.
  • Premium location fee. An additional fee levied by rental companies when you pick your car up from a premium location, for example an airport or DBD depot.
  • Provisional licence. A provisional driving licence. Holders of this licence are required to display “P plates” when driving, and most car rental companies won’t allow you to rent a car on a provisional licence.


  • Refuelling surcharge. Additional fee levied if you fail to return the car with a full tank of fuel.
  • Rental period. The period commencing on the date shown in your rental agreement and ending when you return the car to the rental company.
  • Roadside assistance. Most car rental companies provide a certain level of roadside assistance if you have a breakdown or other mechanical issue in your rental car.


  • Sealed road. A road sealed with tar, bitumen, concrete or some other hard material.
  • Security deposit. See “bond”
  • Senior driver surcharge. Some companies will apply an additional charge for drivers above a specified age limit, for example 65 years.
  • SIPP codes. An industry standard car coding system that identifies the features of a car. Its use ensures that you can always hire the same standard of car right around the world.


  • Theft protection. Insurance that covers your rental vehicle against theft, attempted theft and vandalism.
  • Third party insurance. This insurance provides public liability cover if you accidentally injure someone else or damage their property.
  • Toll administration fee. An administration fee applied by the rental provider if you use its e-tag on toll roads when driving the hire vehicle.


  • Underbody damage. Damage to the vehicle below the bottom of the door seal or below the bottom of the front or rear bumper bars.


  • Vehicle licensing fee / vehicle registration recovery fee. A daily fee imposed by the rental company to recover its costs of registering and licensing the rental vehicle.


  • Young driver surcharge. An additional fee paid by young drivers under a specified age, often 25 years.

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Written by

Tim Falk

Tim Falk is a writer for Finder, writing across a diverse range of topics. Over the course of his 15-year writing career, Tim has reported on everything from travel and personal finance to pets and TV soap operas. When he’s not staring at his computer, you can usually find him exploring the great outdoors. See full profile

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